A no-deal Brexit will create severe problems for Northern Irish businesses and oblige the Republic of Ireland to build border inspection posts, a report has said.
Firms will have “limited room for manoeuvre” as they face an array of export checks, inspections and declarations, according to the report, which was commissioned by Northern Ireland’s Department for the Economy and published this week.
It was a sobering reflection on the challenges if the UK leaves the EU without a deal, according to its authors, Eric Pickett and Michael Lux, lawyers who specialise in EU and international customs law.
“In particular, it confirms the Northern Ireland civil service’s concern about the impact of EU tariffs on food exports to Ireland, and the ability of micro and small enterprises with no experience in customs procedures and operations to continue to export to Ireland,” said a cover note. More than 80% of small Northern Irish exporters trade only with the republic.
The study said Ireland would need to establish inspection posts close to Northern Ireland to monitor trade in animal and food products, raising the spectre of a hard border that has prompted alarm from politicians and police chiefs who worry about attacks by dissident republicans.
The report said use of technology such as electronic monitoring could be expanded but would not obviate the need for physical inspections. It also said the UK and EU could seek an exemption from World Trade Organization rules requiring tariffs and checks, but that it would probably be temporary.
The EU has strict rules for checking animals and food products at border inspection posts (BIPS) near the point of entry. Ireland’s existing posts at Dublin airport, Dublin port and Shannon airport are more than 60 miles from the border. “Consequently, Ireland will have to establish BIPS which are closer to the border,” said the report.
The findings were a blunt reminder that there is no easy fix to the Irish border conundrum that has bedevilled the UK’s attempt to leave the EU and presented a dilemma for the Conservative party leadership candidates vying to replace Theresa May.
The report noted that Switzerland and European Economic Area countries have derogation from inspection rules but that is because they have a deal with the EU. “The problem is that under a no-deal scenario, this option is not available.”
Boris Johnson, Andrea Leadsom, Dominic Raab and Esther McVey have vowed that if they win the Tory leadership they will take the UK out of the EU on 31 October regardless of whether or not a deal is in place.
This week’s report follows a series of other warnings about the impact of a no-deal Brexit on Northern Ireland. David Sterling, the head of its civil service, wrote to local political parties in March saying it could undermine security and worsen unemployment.
The taoiseach, Leo Varadkar, said on Tuesday that it would be a “terrible political miscalculation” for anyone in London to think that a new prime minister would prompt the EU to renegotiate the withdrawal agreement. “That is really to misunderstand how the EU works.” May, he added, was not a bad negotiator and had obtained the best deal possible for the UK.